The 80/20 Principle: The Secret of Achieving More With Less Read Online Free Page B

illustrate the 80/20 Principle. The examples given involve change over time, whereas the 80/20 Principle involves a static breakdown of causes at any one time. Yet there is an important link between the two. Both phenomena help to show how the universe abhors balance. In the former case, we see a natural flight away from a 50/50 split of competing phenomena. A 51/49 split is inherently unstable and tends to gravitate towards a 95/5, 99/1, or even 100/0 split. Equality ends in dominance: that is one of the messages of chaos theory. The 80/20 Principle’s message is different yet complementary. It tells us that, at any one point, a majority of any phenomenon will be explained or caused by a minority of the actors participating in the phenomenon. Eighty percent of the results come from 20 percent of the causes. A few things are important; most are not.
    The 80/20 Principle sorts good movies from bad
     
    One of the most dramatic examples of the 80/20 Principle at work is with movies. Two economists have just made a study of the revenues and lifespans of 300 movies released over an 18-month period. 14 They found that four movies—just 1.3 percent of the total—earned 80 percent of box office revenues; the other 296 movies or 98.7 percent earned only 20 percent of the gross. So movies, which are a good example of unrestricted markets at work, produce virtually an 80/1 rule, a very clear demonstration of the principle of imbalance.
    Even more intriguing is why. It transpires that movie goers behave just like gas particles in random motion. As identified by chaos theory, gas particles, Ping-Pong balls, or movie goers all behave at random but produce a predictably unbalanced result. Word of mouth, from reviews and the first audiences, determines whether the second set of audiences will be large or small, which determines the next set and so on. Movies like Independence Day or Mission Impossible continue to play to packed houses, while other star-studded and expensive movies, like Waterworld or Daylight, very quickly play to smaller and smaller houses, and then none at all. This is the 80/20 Principle working with a vengeance.
    A GUIDE TO THIS GUIDEBOOK
     
    Chapter 2 explains how you can put the 80/20 Principle into practice and explores the distinction between 80/20 Analysis and 80/20 Thinking, both of which are useful methods derived from the 80/20 Principle. 80/20 Analysis is a systematic, quantitative method of comparing causes and effects. 80/20 Thinking is a broader, less precise, and more intuitive procedure, comprising the mental models and habits that enable us to hypothesize what are the important causes of anything important in our lives, to identify these causes, and to make sharp improvements in our position by redeploying our resources accordingly.
    Part Two: Corporate Success Needn’t be a Mystery summarizes the most powerful business uses of the 80/20 Principle. These uses have been tried and tested and found to be of immense value yet remain curiously unexploited by most of the business community. There is little in my summary that is original, but anyone seeking major profit improvement, whether for a small or large business, should find this a very useful primer and the first ever to appear in a book.
    Part Three: Work Less, Earn and Enjoy More shows how the 80/20 Principle can be used to raise the level at which you are operating in both your work and personal life. This is a pioneering attempt to apply the 80/20 Principle on a novel canvas; and the attempt, although I am sure it is imperfect and incomplete in many ways, does lead to some surprising insights. For example, 80 percent of the typical person’s happiness or achievement in life occurs in a small proportion of that life. The peaks of great personal value can usually be greatly expanded. The common view is that we are short of time. My application of the 80/20 Principle suggests the reverse: that we are actually awash with time and profligate in its